11/09/06

RETAILERS LOOK TO CANADA TO BOOST HOLIDAY SALES

Kurt Peters , Executive Editor

Canada Post: Over 50 percent revenue increase for U.S. partners in 2006

TORONTO (November 8, 2006) - American retailers are ramping up their marketing efforts via the Internet and through catalog distribution in order to reach out to Canadian shoppers and take advantage of what’s predicted to be a strong Holiday season in Canada’s direct retail industry. While there are approximately 13,000 catalog titles in circulation in the United States, there are only a little more than 100 in Canada. Canadian retailers operating a direct channel still represent a fraction of sales activity within the overall retail market.

Revenue figures among U.S. retail partners of Canada Post’s Borderfree service has increased over 50 percent in 2006 and Canada Post forecasts a strong Holiday season, estimating this rate will continue to the end of December. Consumer confidence, the strong Canadian dollar and the marketing efforts of Canada Post’s retail partners largely contributed to the figures. Overall retail spending in Canada the holidays last year reached $1.9 billion, up 27 percent from the year before.

This wide-open market is spurring an increasing trend among electronics, apparel and cosmetics retailers to double their efforts in the Canadian retail market, now estimated to be $329 billion USD. U.S. merchants including Crate & Barrel, Sephora and Brookstone, Domestications, and Casual Living are among those leveraging Canada Post’s Borderfree service to ensure an easy “cross-border” experience.

“There has never been a better time to chart a successful course of action in Canada’s direct mail industry,” said Patrick Bartlett, General Manager of the Catalog and Borderfree divisions of Canada Post. “This is thanks to the confluence of several powerful economic forces - brisk retail sales, tax cuts and the strongest Canadian dollar we’ve seen in 30 years.”

It has been historically difficult for Canadians to buy American products because of customs and currency issues, shipping, returns, and hidden charges. Canada Post’s Catalog and Borderfree divisions connect retailers to Canadian consumers by helping U.S. retailers provide a seamless shopping experience and direct marketing services to identify, attract, and convert buyers.

Seventy-eight percent of Canadians purchased a product online in 2006, according to eMarketer. Their online spend is similar to that of their American counterparts; Canadian online shoppers have spent $447 in the last 6 months versus the $566 of an American shopper, according to the global retail research group, JC Williams. Broadband Internet penetration in Canada is the highest among G7 nations at 77 percent while 57 percent of Americans have broadband connectivity, according to a 2005 Ipsos-Reid study.

Catalogs…Canada Post this month launched the first “lookbook™ catalogue,” described as a “catalog of catalogs” which includes product lines of more than 12 U.S retailers and is being distributed to 700,000 Canadian households. The first retailers to participate in the lookbook include Eddie Bauer, Smarthome, Brookstone, Cabela’s, and Tiger Direct. Because of intense retailer interest, Canada Post has released plans to offer direct retailers the opportunity to add their product selections within the pages of the lookbook for the Spring and Holiday 2007 editions. The participation deadline for the spring issue is November 27.

About Canada Post’s Borderfree Service
Canada Post is a strategic partner of multi-channel retailers planning to expand into international markets. Through Borderfree’s suite of e-commerce technology and cross border logistics solutions, Canada Post enables direct retailers to manage their international customer shopping experience and optimize their logistics operations. Canada Post is Canada’s postal administration and a $6 billion (CAD) Crown corporation. With proven technology and unparalleled market intelligence, Canada Post has helped leading U.S. retailers such as Brookstone, Crate & Barrel and Sephora achieve success in new markets since 1999. Visit www.borderfree.net for more information.

Topics:

Brookstone, Cabela's, Finance, multichannel retailer, Online shopping

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